Middle Class Cause of Death? Suicide

Fans lost a lot of money betting on Manny Pacquiao. Millions betting on any horse other than Pharoah to win the Kentucky Derby lost lots of money. But no politician ever lost a dime betting on the eagerness of American voters to be manipulated.

The latest example is the U.S. House of Representatives vote to repeal the “death tax,” once called the “estate tax.” Most won’t recognize the term “estate tax.” When Newt Gingrich took out his “Contract on America” in the 90s, pollsters advised him that the average “Joe” understood “estate” taxes applied only to the very rich. They didn’t mind the tax being applied to those who had accumulated exorbitant wealth.

Without changing their objective of helping the rich get richer, they changed the terminology. The estate tax became the “death tax.” Poll responders reversed themselves. The manipulated became convinced by the change that the tax applied to them. After all not everyone leaves a taxable estate but everyone dies.

You’ve heard of the accumulation of wealth among the 1%? According to Wall Street Journal columnist Jonathan Clements, the so-called “death tax” effects less than two-tenths of the one percent, meaning 99.8% of taxpayers cannot be taxed under existing law. Those in the middle class who are cheering the repeal need to know what a belly-laugh the .002% is getting in their mansions.

The most appropriate term for this tax is “the billionaire’s tax.” It would reasonable to guess that not one of this newspaper’s readers would be taxed under the law your congressmen voted to repeal. The Tax Policy Center documented only 20 small businesses and farms nationwide owing estate taxes in 2013. Those 20 estates owed just 4.9%.

Since then, the exemption has been increased. No estate with less than 5.4 million dollars is taxed. If you have smart tax advisers, as the grossly wealthy tend to have, that number is closer to 11 million.

That eleven-million dollar threshold comes only after wealthy taxpayers take deductions, including gifts to children and charity and purchasing life insurance, which passes the benefits along with no estate tax.

After exemptions and loopholes, when the top two-tenths of one percent eventually have to pay an inheritance tax, their heirs still keep the eleven million plus 65% of the remainder. Not a bad haul for the children of the super rich.

Where does the estate tax idea come from? Not from liberals but from the Founding Fathers and other conservative Americans. Teddy Roosevelt supported a tax on inheritances saying, “No man should receive a dollar unless that dollar has been fairly earned.” In “The Wealth of Nations,” Adam Smith wrote, “When…great estates derive their security from the laws of their country, nothing can be more completely absurd. They are founded upon the most absurd of all suppositions, the supposition that every successive generation of men have not an equal right to the earth.” Seems like orthodox conservative philosophy.

Wyoming has a unique place in the history of the billionaire’s tax. When Mike Sullivan was Governor in the 90s, our state was in fiscal trouble. Going through a “bust” cycle, Wyoming was experiencing draconian budget cuts and appeared unable to balance its budget. Then a wealthy Jackson resident suddenly passed away leaving such a large estate that Wyoming was entitled to share the estate tax payment with the IRS. Governor Sullivan later said, “We balanced the budget because a lady who died in Jackson left a $20 million estate tax, and that saved us for that budget period.”

Since then, Republicans in the state house and congress made sure that won’t happen again. They repealed the laws making that possible.

The clamor to rid America of the billionaire’s tax started more recently as the greedy decided they just couldn’t get enough. This is about helping the Koch Brothers and their buddies. Their children will reap the reward. Yours will get to make up the 269 billion dollar loss to the treasury that the repeal will cost.

Still cheering?

A shout out to those middle class parents on the Tea Party picket line…your kids are now indentured servants. And you are accomplices in the crime.

For the first time, credit card debt has been outpaced by student loan debt. If you were looking for the last nail in the coffin of the middle class, this may be it.

There are striking parallels between student loan debt and the ongoing housing collapse. Home ownership, like a college education is part of the American dream. As with the home loans that resulted in so many foreclosures, student loans are easy money. They dished out loosely to young people who often have no idea how much they are borrowing or the consequences. Students receive thousands of dollars without any plan to pay back. Loans are made in amounts having no relationship whatsoever with an ability to pay derived from the education the money purchases. People whose credit rating wouldn’t qualify them for a loan to buy a 1969 Corvair are freely sent checks for thousands of dollars with no co-signer or hope of repayment.

Pell grants are being cut significantly even as college tuitions are increasing relentlessly and unconscionably. Americans who are holding Tea Parties should start tending their own children and quit being used by the wealthy as a front in the battles over health care, abortion, gun control, tax reform and the budget. The education of their own children is at risk.

Example…middle class dupes are crying out for repeal of the “death tax” even though the tax will never impact on them. But by calling it the “death tax” wealthy folks who don’t want to pay their fair share of the costs of America, enlist the middle class so they don’t have to admit they don’t want to contribute from their plunder. As a result, the federal treasury is denied billions in tax revenue as the gluttonously wealthy are permitted to keep ill-gotten gains “in the family.” Without that revenue, the deficit reduction efforts will have to target, among others, programs helping the middle class youngsters get an education.

Meanwhile, the wealthy send their children to exclusive schools, paying whatever the market bears at Harvard, Yale or Wellesley. Middle class kids who want an education at a community college are forced to borrow from institutions owned by the rich to pay tuition, incurring debts they can never repay. By the way, lobbyists for the wealthy got Congress to pass a law prohibiting these college loans from even being discharged in bankruptcy court.

The bottom line, as “they” call it, is the gap between the rich and those in the middle will grow, the middle class will slowly diminish as their children can no longer compete in a world where education costs are beyond the reach of those who don’t have the money to pay the tuition.

A shout out to those middle class parents on the Tea Party picket line…your kids are now indentured servants. And you are accomplices in the crime.

John Steinbeck wrote, “Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.”

You have to hand it to them. People with a lot of money understand what is at stake in America and that is more than I can say for most of the “temporarily embarrassed millionaires” of the middle class. Wealthy folks know how to protect their interests. They use the middle class.

I don’t even know what passes for socialism these days but I’d sure like to see us demand that the capitalism we proclaim have a conscience.